GO
Loading...

Another bitcoin site bites the dust

Just a week after one of bitcoin's major exchanges, Mt.Gox, went offline—and then filed for bankruptcy—a bitcoin bank was forced to close after hackers stole 896 bitcoins, worth over $600,000.

Lam Yik Fei | Getty Images

The bitcoin bank Flexcoin posted a note on its site stating: "On March 2, 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. ... As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

The term "hot wallet" refers to bitcoins stored in an online wallet connected to the Internet.

(Read more: Bitcoin believers unfazed by losses in Mt.Gox fall)

Last week, Mt.Gox blamed hackers for stealing an estimated $480 million worth of bitcoins, due to what it called a weakness in its system. The company opted for bankruptcy protection in Japan on Friday.

Despite detailing outstanding debts of about 6.5 billion Japanese yen ($63.6 million), 850,000 lost bitcoins and 127,000 empty-handed customers, the exchange said it was looking to continue doing business.

(Read more: How to make money from bitcoin)

While Reuters recently reported that a bitcoin user is suing Mt.Gox over its million-dollar losses, Flexcoin emphasized that not all was lost for those users who had put their bitcoins into "cold storage," meaning coins held offline and not "within reach of the attacker."

"Users who put their coins into cold storage will be contacted by Flexcoin and asked to verify their identity. Once identified, cold storage coins will be transferred out free of charge," Flexcoin's note read.

(Read more: Bitcoin sheds Mt.Gox albatross, rallies nearly 20 percent)

"All other users will be directed to Flexcoin's 'Terms of service' located at "Flexcoin.com/118.html" a document which was agreed on, upon signing up with Flexcoin."

Flexcoin concluded the statement by confirming that it will be working with law enforcement to track the source of the hacking.

(Read more: Back to work at bitcoin's embattled Mt.Gox)

While Tuesday's news is yet another story about the troubles the virtual currency has with security, it has not affected bitcoin's price as it rallies after the Mt.Gox news last week. The currency climbed 17.99 percent on Monday and was trading 5 percent higher on Tuesday, with one bitcoin worth just under $700, according to Coindesk, which tracks the price of bitcoin.

—By CNBC's Kiran Moodley. Follow him on Twitter @kirancmoodley.

Symbol
Price
 
Change
%Change
Bitcoin/USD
---

Featured